Attached files
EXHIBIT 10.2
ASSUMPTION
REINSURANCE AGREEMENT
Effective
as of December 31, 2009
between
SECURITY
NATIONAL LIFE INSURANCE COMPANY OF LOUISIANA
and
SECURITY
NATIONAL LIFE INSURANCE COMPANY
ASSUMPTION REINSURANCE
AGREEMENT
THIS
ASSUMPTION REINSURANCE AGREEMENT (hereinafter referred to as the "Assumption
Reinsurance Agreement" or the "Agreement") is made and entered into this 31st
day of December, 2009 (the "Assumption Effective Date"), by and between SECURITY
NATIONAL LIFE INSURANCE COMPANY OF LOUISIANA, a Louisiana domiciled insurance
company (hereinafter referred to as the "Company") and SECURITY NATIONAL LIFE
INSURANCE COMPANY, a Utah domiciled insurance company (hereinafter referred to
as the "Reinsurer").
WHEREAS,
the Company is the issuer of certain insurance Policies, and
WHEREAS,
the Company will cede its risks under the Policies to the Reinsurer on an
assumption reinsurance basis; and
WHEREAS,
from time to time following the effective date hereof, and upon receipt of all
necessary consents and approvals, the Reinsurer will assume the Policies
pursuant to the terms of this Assumption Reinsurance Agreement;
NOW,
THEREFORE, in
consideration of the mutual promises and covenants set forth herein, and in
reliance upon the representations, warranties, conditions and covenants
contained herein, and intending to be legally bound hereby, the Company and the
Reinsurer hereby agree as follows:
ARTICLE
I
DEFINITION OF
TERMS
It is
intended that capitalized terms should have the following meanings when used in
this Assumption Reinsurance Agreement:
1.1. Assumed Policy or
Policies. Each and all Policies that have been reinsured and
assumed by the Reinsurer pursuant to the terms of this Assumption Reinsurance
Agreement between the Reinsurer and the Company.
1.2. Assumption Reinsurance
Agreement. This Assumption Reinsurance Agreement to be entered
into between the Company and the Reinsurer.
1.3. Assumption
Certificate. The certificate to be issued by the Reinsurer to
the Policyholder of any Assumed Policy under the provisions of this Assumption
Reinsurance Agreement.
1.4. Assumption Effective
Date. The date upon which any of the Policies are to be
assumed by the Reinsurer under the provisions of this Assumption Reinsurance
Agreement.
1.5. Books and
Records. All original files and records, in whatever form, in
the possession or under the control of the Company related to the Policies and
useful or necessary in their underwriting, reserving, or administration,
including, but not limited to, policy files, claims files and underwriting
files, policy form files (including all files relating to the filing and
approval of policy forms, applications and riders with insurance regulatory
authorities); rate filings and actuarial data developed or utilized by the
Company or on its behalf in support of premium rates charged under the Policies;
and premium tax records and reports for the Policies now in the hands of the
Company.
1.6. Closing
Date. The date upon which the Closing shall take place, which
shall be December 31, 2009, or such other date and time as the parties may
mutually agree in writing.
1.7. Extracontractual Liabilities. Any
claim or liability under, in connection with or with respect to the Policies for
bad faith, punitive, exemplary or other extra-contractual damages that are based
upon, relate to or arise out of any act, error or omission of a party, or any of
such party's officers, directors, agents or employees, whether intentional or
otherwise.
1.8. Loss. All
costs and expenses (including interest, penalties, reasonable attorneys',
accountants' and actuaries' fees, and any other costs and expenses incident to
any suit, action or proceeding), damages, charges, deficiencies, liabilities,
obligations, claims and judgments sustained or incurred by, or asserted against,
a party entitled to indemnity hereunder.
1.9. Novation. The
substitution of the Reinsurer for the Company under an Assumed Policy with the
result that the Reinsurer becomes directly liable to the Policyholder as of the
Assumption Effective Date and the Company's liability to the Policyholder under
such Assumed Policy is extinguished.
1.10. Policyholder. Any
individual or entity who is the owner of a Policy or who has the right to
terminate or lapse the Policy, effect changes of beneficiary, coverage limits,
add or terminate persons covered under such Policy or direct any other policy
changes in such Policy.
1.11. Policy or
Policies. Each or all of those insurance policies issued by
the Company that are (a) identified by policy number and policyholder name on
the Policy Schedule referred to in Schedule A attached hereto and
incorporated herein, as may be revised from time to time by mutual agreement of
the parties, and (b) in force and effect as of the Closing Date.
1.12. Required Assumption
Approvals. The approvals of, or pre-closing notice filings
with, any insurance regulatory authorities that may be required in connection
with the reinsurance of any of the Policies by the Reinsurer on an assumption
reinsurance basis, including the approval of the Assumption Certificate to be
issued by the Reinsurer to the Policyholders of any Assumed
Policy.
2
ARTICLE
II
BASIS OF
REINSURANCE
2.1. Assumption
Reinsurance. From time to time after the date of this
Assumption Reinsurance Agreement, as Required Assumption Approvals are received,
the Company hereby cedes to the Reinsurer and the Reinsurer hereby assumes, by
means of assumption reinsurance, all of the contractual rights, obligations,
liabilities and risks of the Company under or with respect to each Policy. The
parties intend to accomplish, where permitted, as soon as practicable with
respect to each jurisdiction in which the Policies have been issued, transfers
of the Company's contractual rights, obligations, liabilities and risks with
respect to such Policies, with the result that the Reinsurer, as transferee, in
all respects and conditions, shall succeed the Company as the insurer under the
terms and provisions of each of such Policies, as though the Reinsurer had
originally issued them, and to transfer to the Reinsurer, as administrator, full
and complete responsibility for servicing and administering such Policies in
accordance with the terms and conditions of this Assumption Reinsurance
Agreement and the Policies. No additional monetary consideration shall be due
from the Reinsurer to the Company or from the Company to the Reinsurer upon the
assumption of any Policies, and no additional reserves shall be transferred by
the Company to the Reinsure in connection therewith.
2.2. Conditions of Reinsurance:
Regulatory Approvals. Consummation of the reinsurance
contemplated by this Assumption Reinsurance Agreement with respect to any Policy
is subject to and contingent upon receipt by the Reinsurer of all Required
Assumption Approvals with respect to each Policy. The Reinsurer shall be
responsible for obtaining all Required Assumption Approvals. Each party shall
use its best efforts to assist the other party in obtaining the Required
Assumption Approvals.
2.3. Effect of
Reinsurance. The reinsurance effected by this Assumption
Reinsurance Agreement shall create a Novation under all of the Assumed Policies
in accordance with each of the terms and conditions thereof, and subject to all
rights, privileges, defenses, offsets, cross-actions and counterclaims to which
the Company would have been entitled had it continued to act as the insurer
thereunder. It is expressly understood and agreed by the parties to this
Assumption Reinsurance Agreement that no such rights, privileges, defenses,
offsets, cross-actions or counterclaims are waived by the execution of this
Assumption Reinsurance Agreement or the consummation of the transactions
contemplated herein, and that the Reinsurer shall be fully subrogated to all
such rights, privileges, defenses, offsets, cross-actions and counterclaims. On
the applicable Assumption Effective Date, the Reinsurer shall be the successor
of the Company with respect to the Assumed Policy, and such Assumed Policy shall
be the direct obligation of the Reinsurer, and the Company shall have no further
rights or liability thereunder. The Policyholder and any persons insured under
the Assumed Policy shall thereafter disregard the Company as a party to the
Assumed Policy and treat the Reinsurer as if it had been originally obligated
under the Assumed Policy. On and after the applicable Assumption Effective Date,
the Policyholder and the insured or beneficiary under any Assumed Policy shall
have the right to file claims for benefits under the Assumed Policy directly
with the Reinsurer, and shall have a direct right of action against the
Reinsurer therefor. Any payments for benefits made under any Assumed Policy by
the Company prior to the applicable Assumption Effective Date shall be deemed to
have been made by the Reinsurer for purposes of determining any maximum benefits
payable under any of the Assumed Policies.
3
ARTICLE
III
UNDERTAKINGS OF
REINSURER
3.1. Policy
Administration. On and after the applicable Assumption
Effective Date, the Reinsurer shall assume all responsibility for servicing and
administration of the Assumed Policies, including without limitation, the
payment of all allowable claims for benefits under the Assumed Policies in
accordance with the contractual terms and provisions of the Assumed Policies and
the investigation, adjustment, appraisal, defense or settlement thereof, at the
Reinsurer's sole cost and expense; billing and collection of premiums under the
Assumed Policies; preparation of policy changes, endorsements, and such other
administrative services as the Reinsurer, in its sole discretion, deems
necessary, appropriate, or lawful in connection with the Assumed Policies, as
though such Assumed Policies were originally issued as direct insurance
obligations of the Reinsurer.
3.2. Premium Payments:
Negotiation of Checks. Upon and after the applicable
Assumption Effective Date, all premium payments under the Assumed Policies shall
be the sole property of the Reinsurer. The Reinsurer shall be authorized to
endorse for payment all checks, drafts, and money orders payable to the Company
with respect to premiums payable on the Assumed Policies. Effective as of the
applicable Assumption Effective Date, the Company hereby assigns all of its
rights and privileges, to the extent permitted by law, to draft or debit the
accounts of any Policyholders for premiums due under the Assumed Policies
pursuant to existing pre-authorized bank draft or electronic fund transfer
arrangements between the Company and such Policyholders.
3.3. Assumption
Certificates. As promptly as possible after the receipt of any
Required Assumption Approvals, the Reinsurer shall issue to each of the
Policyholders of the Assumed Policies an Assumption Certificate, and provide
satisfactory evidence thereof to the Company. The Assumption Certificate shall
be effective on the applicable Assumption Effective Date, and shall be mailed to
each Policyholder's last known address of record furnished to the Reinsurer by
the Company.
3.4. Premium
Taxes. The Reinsurer shall be and shall remain liable for
payment of premium taxes and state guaranty fund assessments on premiums
received under the Assumed Policies on and after the applicable Assumption
Effective Date.
4
3.5. Forwarding Checks and
Correspondence. On and after the applicable Assumption
Effective Date, all notices, claims and correspondence received by the Company
pertaining to the Assumed Policies, including applications for reinstatements of
lapsed policies, will be forwarded promptly by the Company to the Reinsurer. All
cheeks, drafts or money orders held or received by the Company for premiums due
under the Assumed Policies shall be properly endorsed to the Reinsurer and
forwarded promptly to the Reinsurer by the Company.
ARTICLE
IV
INDEMNIFICATION
4.1. Reinsured
Claims. All claims under the Assumed Policies on and after the
applicable Assumption Effective Date shall be the responsibility of the
Reinsurer, and the Reinsurer shall indemnify and hold the Company harmless from
and against all such claims, including the Company's costs in connection
therewith.
4.2. Extracontractual
Liabilities. The Reinsurer assumes no liability of any kind
hereunder for any Extracontractual Liabilities that the Company may have
incurred or may incur by reason of any actions, inactions or misconduct of the
Company in connection with such Assumed Policies occurring prior to the Closing
Date.
4.3. Cooperation. Each
party agrees that it will cooperate fully with the other party in the
satisfactory settlement of any and all claims, insofar as possible.
4.4. Indemnification. From
and after the applicable Assumption Effective Date, the Reinsurer shall
reimburse the Company for, and shall indemnify and hold the Company harmless and
defend the Company from and against any and all Loss sustained or incurred by,
or asserted against, the Company (a) with respect to the payment of
amounts due under or in connection with any of the Assumed Policies, whether
incurred on or before the Assumption Effective Date; (b) which arise out of (i)
any breach or nonfulfillment by the Reinsurer of, or any failure by the
Reinsurer to perform, any of the covenants, terms or conditions of or any of its
duties or obligations under this Agreement; or, (ii) any action or inaction of
the Reinsurer under or with respect to any of the Assumed Policies (including,
without limitation, any Extracontractual Liabilities that the Company may have
incurred or may incur by reason of any actions, inactions or misconduct of the
Reinsurer in connection with such Assumed Policies occurring on or after the
Assumption Effective Date); or (c) with respect to any enforcement of this
indemnity.
5
ARTICLE
V
MISCELLANEOUS
PROVISIONS
5.1. Notices. Any
and all notices and other communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given when
(a) received by the receiving party if mailed via United States registered or
certified mail, return receipt requested, or mailed by United: States overnight
express mail, (b) sent by facsimile or telecopy machine or email, followed by
confirmation mailed by United States first-class mail or overnight express mail,
or (c) delivered in person or by commercial courier to the parties, provided
written acknowledgment of receipt is obtained, in each case at the address or
addresses as follows:
If to the
Company:
Security
National Life Insurance Company of Louisiana
5300
South 360 West, Suite 200
Salt Lake
City, Utah 84123
Attn: Stephen
M. Sill, Vice President, Treasurer
and Chief Financial
Officer
If to the
Reinsurer:
Security
National Life Insurance Company
5300
South 360 West, Suite 200
Salt Lake
City, Utah 84123
Attn: Stephen
M. Sill, Vice President, Treasurer
and Chief Financial Officer
5.2. Entire
Agreement. This Agreement constitutes the sole and entire
agreement between the parties hereto with respect to the subject matter hereof,
and supersede all prior discussions and agreements between the parties with
respect to the subject matter hereof, which are merged with and into this
Agreement.
5.3. Assignment. This
Agreement shall not be assigned by either of the parties hereto without the
prior written approval of the other party.
5.4. Confidentiality. Each
of the parties shall maintain the confidentiality of all information related to
the Policies and all other information denominated as confidential by the other
party provided to it in connection with this Agreement and shall not disclose
such information to any third parties without prior written consent of the other
party, except as may be required by regulatory authorities, or pursuant to legal
process.
5.5. Misunderstandings and
Oversights. If any failure to pay amounts due or to perform
any other act required of either party by this Agreement is shown to be
unintentional and caused by misunderstanding, oversight or clerical error, then
this Agreement shall not be deemed in breach thereby, but such error shall be
corrected by restoring both parties to the positions they would have occupied
had error not occurred.
6
5.6. Waivers and
Amendments. Any term or condition of this Assumption
Reinsurance Agreement may be waived at any time by the party that is entitled to
the benefit thereof. Such waiver must be in writing and must be executed by an
executive officer of such party. A waiver on one occasion will not be deemed to
be a waiver of the same or any other term or condition on a future occasion.
This Agreement may be modified or amended only by a writing duly executed by an
executive officer of the Company and the Reinsurer, respectively.
5.7. Third Party
Beneficiaries. This Agreement is for the sole and exclusive
benefit of the parties and their successors and permitted assigns and, to the
extent expressly set forth in this Agreement, those Policyholders, insureds and
beneficiaries who are insured under Assumed Policies.
5.8. Governing
Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Utah, without regard to its conflicts
of law doctrine.
5.9. Counterparts. This
Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which shall constitute one and the same
instrument.
5.10. Headings. The
headings in this Agreement have been inserted for convenience and do not
constitute matter to be construed or interpreted in connection with this
Agreement.
5.11. Severability. If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future law or if determined by a court of competent
jurisdiction to be unenforceable, and if the rights or obligations of the
Company or the Reinsurer under this Agreement will not be materially and
adversely affected thereby, such provision shall be fully severable, and this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
7
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of
the date first above written.
|
SECURITY
NATIONAL LIFE INSURANCE
|
|
|
COMPANY
OF LOUISIANA
|
|
|
By: /s/
Scott M.
Quist
|
|
|
Scott
M. Quist, President
|
|
|
SECURITY
NATIONAL LIFE INSURANCE
|
|
|
COMPANY
|
|
|
By: /s/
Scott M.
Quist
|
|
|
Scott
M. Quist, President
|
8
SAMPLE
SECURITY
NATIONAL LIFE INSURANCE COMPANY
5300
South 360 West, Suite 200
Salt Lake
City, Utah 84123
Policy
No.
John
Doe
123 Main
Street
City,
State, Zip
CERTIFICATE
OF ASSUMPTION
This is
to certify that pursuant to the terms of an Assumption Reinsurance Agreement,
Security National Life Insurance Company, a Utah domiciled life insurance
company, with its home office at 5300 South 360 West, Suite 200, Salt Lake City,
Utah 84123, has reinsured and assumed all of the contractual
liabilities of Security National Life Insurance Company of Louisiana,
a Louisiana domiciled insurance company, under this Policy on the same terms and
conditions as set forth in this Policy; subject to any available defenses and
offsets, and subject to the terms and conditions set forth in the Assumption
Reinsurance Agreement and this Assumption Certificate, which will become a part
of the Policy.
From and
after the date hereof, you should submit all claims under this Policy, whenever
incurred, and all premiums due under this Policy, to the following
address:
SECURITY
NATIONAL LIFE INSURANCE COMPANY
5300
South 360 West, Suite 200
Salt Lake
City, Utah 84123
Phone: 801-264-1060
Toll
Free: 1-800-574-7117
IN
WITNESS WHEREOF, Security National Life Insurance Company has caused this
Certificate to be executed at its administrative office in Salt Lake City, Utah,
by its President as of the ____ day of December, 2009, its effective
date.
|
_____________________________
|
______________________________
|
|
_____________,
Secretary
|
_______________,
President
|
9